HILSENRATH’S TAKE
The U.S. Commerce Department is widely expected to report a big increase in durable goods orders today, thanks to a jump in aircraft orders booked by Boeing. Several Wall Street economists believe orders increased in July by 20% or more. That’s good news for the economy. An investment boom could provide new energy to an otherwise underwhelming recovery. Investment in equipment is up just 9% from its pre-recession peak.

The aircraft surge also points to a gap on the investment side of the U.S. recovery. American firms have been investing much more aggressively in stuff than in ideas in this upturn. Investment in equipment is up 57% since the end of the recession, to an annual rate of $991 billion in the second quarter, according to the Commerce Department, bouncing back after falling sharply during the downturn. Investment in intellectual property products is up 17% to an annual rate of $642 billion, growing slowly but steadily after a smaller downturn. An ideas-driven recovery would be even more encouraging.

- By Jon Hilsenrath

MORNING MINUTES: KEY DEVELOPMENTS AROUND THE WORLD

Odds and Ends as Jackson Hole Notebook Closes. Lots happened at the Federal Reserve’s annual Jackson Hole economics symposium. Not all of it made headlines. Here’s a rundown of odds and ends we picked up but which got buried in stories or left out altogether.

Some Answers to Fed Policy Questions from Jackson Hole. Before heading out to Jackson Hole, the Journal laid out a few key questions for meeting participants, which included top policy makers from around the world and prominent academic economists. Here are some of the answers they gave on the sidelines of the gathering.

BOJ Pushing for Greater Global Yen Role. The Bank of Japan is pushing to extend the global reach of the country’s currency and bonds as part of a broader effort to modernize Japan’s financial markets. By trying to overhaul the international trading process for Japanese government bonds and the yen, the BOJ is quietly supporting Prime Minister Shinzo Abe’s economic growth strategy–albeit in a much less visible way than the dramatic monetary easing program it has undertaken for the past year and a half.

Draghi Brings Inflation Expectations Firmly Into Focus. European Central Bank President Mario Draghi made waves at last weekend’s Jackson Hole, Wyo., conference, signaling a departure from the austerity-focus mindset that has dominated the euro zone’s debt crisis the past five years. But his comments on inflation expectations–which have been falling–were noteworthy, too and opened the door wider to full-blown quantitative easing.

Political Turmoil in Paris Leaves Investors Focused on Frankfurt. French President François Hollande sacked his government after two senior ministers were openly critical of government economic policy over the weekend. But a second cabinet reshuffle in less than six months is likely to prove more of an economic whimper. That leaves investors more interested in what shifts in euro-zone monetary policy might come from Frankfurt, home to the ECB.

Bank of Israel Cuts Key Interest Rate to Record Low. The Bank of Israel on Monday said it would cut its benchmark rate by 25 basis points to a record-low 0.25%, citing slower inflation and sluggish global growth amid worries caused by the continuing armed conflict with militants in the Gaza Strip.

Israeli Central Bank Not Optimistic on Global Economy. The Israeli economy is particularly sensitive to global conditions — it has a small population, and trade with their neighbors is extremely limited — so it’s worth noting what the central bank has to say there. And it’s not particularly optimistic.

India’s Online Rules to Change How Companies Charge Customers. India’s central bank warned international companies that they must follow domestic online payment rules—something that could force Uber Technologies Inc. and others to change the way they operate, analysts said. The Reserve Bank of India said all transactions between Indian customers and Indian sellers need to be settled in the local currency, the rupee, and follow a two-step security procedure.

GRAPHIC CONTENT
Fed officials are signaling they are on track to start slowly raising interest rates next year, a shift that means a delicate balancing act for investors. Stocks so far have largely shaken off concerns about how the market will do without the Fed’s monthly stimulus, which is due to end in October and has been seen as supporting asset prices. But money managers are increasingly on guard should the Fed suddenly decide to accelerate its timetable for boosting short-term interest rates, which have been near zero since December 2008.

RESEARCHKansas City Fed: China Will Need Stimulus to Hit 7.5% Growth Target. A sputtering housing market threatens China’s economic outlook and would probably force the central bank and local governments to intervene if they want to hit the country’s 7.5% economic growth target for this year, according to research from the Federal Reserve Bank of Kansas City. The latest figures “indicate the expansion of the real estate sector has slowed significantly,” wrote economist Jun Nie and research associate Guangye Cao. “Taking both the short- and long-term factors into account, the real estate sector’s recent slowdown is likely to continue as housing activity stabilizes at a lower growth path.”

COMMENTARY
The Fed and Chairwoman Janet Yellen are not as powerful as you think, Zachary Karabell writes in Slate. “The elevation of the Fed chair to current heights is not benign. It fosters an unhealthy dependency and excuses policymakers and market participants from making their own judgments, as well as their own mistakes.”

Ms. Yellen’s Fed is revolutionary in that it has forced markets to focus on “the financial fate of the American working stiff” in the form of wage growth, Matt Phillips writes in Quartz. “Essentially, Yellen is arguing that fast-rising wages, viewed for decades as an inflationary red flag and a reason to hike rates, should instead be welcomed, at least for now.”

Determining how much slack remains in the U.S. labor market “will determine how soon the Fed finally begins tightening the monetary screws by lifting interest rates off the floor where they’ve been since the financial crisis,” Robert Litan writes for the Journal’s Think Tank. “But that’s only the short-term challenge confronting the nation’s monetary authorities. The longer-term challenging is figuring out how fast the economy can grow on a sustained basis over the long-run. The higher that number, the more relaxed the Fed can be without igniting accelerating inflation during the inevitable bouncing around of GDP growth and unemployment data from quarter to quarter.”

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